Why did they close my PayPal account?

When PayPal “permanently” limits Umang Nahata’s account, he appeals the decision. When his wife’s account is also frozen, he turns to me for help. Can I get their accounts unfrozen?

Question: PayPal has closed my account, and I need your help getting it restored. This summer, I added funds to my PayPal account through Paypal My Cash and withdrew those funds to my bank account. I have the receipts.

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In August, I received an email from PayPal that said my account was being “limited” because of activity that appeared to be “high risk.” I called PayPal and explained the flagged transactions, and my account was restored.

But a day later, PayPal deactivated my account again. I’ve tried to appeal to PayPal in writing, but have had no success. I escalated my appeal, but was told my account had been “limited permanently.” Now my wife’s account has been permanently limited, too. Can you help? — Umang Nahata, Cleveland

Answer: Well, this one’s a real mystery.

PayPal’s voluminous user agreement forbids a lot of things, including posting content that is obscene or offensive, attempting to use multiple currencies for speculative trading, and altering, reproducing, adapting, distributing, displaying, publishing, or reverse engineering its software.

You could have done any number of things that PayPal doesn’t like, and unless it explicitly tells you how you’ve sinned, you might never know.

When I get a case like this, I assume everyone has the best of intentions and this is probably just a simple misunderstanding. Maybe you made a few innocent transactions on your account that flagged PayPal’s fraud-detection system, and when your account was frozen you tried to do the same thing with your wife’s account, with the same results.

I also assumed that the company — in this case, PayPal — just wasn’t clear about what you had done that apparently violated its terms, and would be eager to set the record straight.

I’m afraid I made too many assumptions with your closed accounts, but I’m not entirely sure which assumptions were wrong.

I asked PayPal if it could circle back with you and let you know how to make things right. What happened next is a case study in how not to do public relations.

“Unfortunately, we cannot comment on the specifics of any user accounts due to PayPal’s privacy policy,” a PayPal spokeswoman told me. “However, we can confirm that we are looking into the matter.”

I’m not going to name the spokeswoman. She’s probably just doing what she’s told, anyway.

“That said, would you be available for a call next week to discuss PayPal’s stance on customer service? PayPal’s president, David Marcus, recently wrote a blog post on the company’s ‘customer first’ approach and I believe it would be a topic of interest to you,” she asked me in a follow-up message.

Here’s a link to the post about the PayPal way.

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Apparently, the “PayPal way” doesn’t include working with consumer advocates. When I suggested that rather than speak with an executive it might be prudent to wait until this case was resolved, I received a frosty response.

“Due to PayPal’s privacy policy we cannot under any circumstances discuss the specifics of any one case with anyone who is not the account user in question. Would you like to speak with PayPal’s Senior Director of Global Initiatives to answer any questions?” the spokeswoman said.

No, not really.

I wanted PayPal to answer one simple question: Why is the account frozen? Even if it doesn’t tell me why “for privacy reasons,” then at least you’d know what you did to deserve being banished by PayPal.

During the next several months, I stayed in contact with you, asking if PayPal had responded to you with a more complete explanation. PayPal remained silent, according to you. I contacted PayPal again to see if it had anything to add to this case. It had nothing to add.

So, no resolution on this one. Except maybe you should be careful of what you do when you’re on PayPal. You may be breaking a rule without even knowing it. And if you do, PayPal may not tell you anything. They’ll just freeze your account with no further explanation.

I’m not sure if I like the PayPal way.

Do you like the "PayPal way"?

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